David Becker / AP
***DO NOT USE PER ALLEGIANT. THIS MD-80 AIRCRAFT IS NO LONGER PART OF THEIR FLEET*** ORIGINAL CAPTION: Two Allegiant Air jets taxi at McCarran International Airport May 9, 2013.
Tuesday, April 21, 2020 | 2:57 p.m.
Allegiant Travel Co. is getting more than $170 million in federal emergency relief funds to help pay its workers, the company announced today.
The funding will support salaries and other benefits for Allegiant’s 4,500 employees, including about 1,500 in Las Vegas, the company said in a news release.
The relief package, worth nearly $172 million, will cover close to 75% of Allegiant’s payroll and benefit costs through Sept. 30, the company said.
Airlines have been among the hardest-hit during the economic downturn caused by the coronavirus pandemic.
Allegiant reported in a Securities and Exchange Commission filing earlier this month that it was burning through up to $2.5 million a day because of reduced business.
The company said in early April that it had applied for payroll support through the U.S. Treasury Department.
The federal aid “recognizes the essential role our team members play in our country’s air travel infrastructure,” Allegiant Chairman and CEO Maurice Gallagher said in a statement.
“Their dedication in the face of the unprecedented crisis brought on by the COVID-19 outbreak has been tremendous — and their continued work will be critical to our nation’s successful recovery in the months to come,” Gallagher said.
More than 1,100 Allegiant employees — about a quarter of the company’s workforce — have agreed to take short-term leave or voluntary pay reductions, the company said.
The company said it is encouraging more employees to take part in the programs.
About $21 million from the package is in the form of a 10-year, low-interest loan, Allegiant officials said.
Under terms of the loan, the company will issue warrants to the Department of the Treasury to purchase 25,890 shares of Allegiant common stock.
The company will also have a cash settlement option.
Allegiant shares closed at $72.72 in Nasdaq Composite trading today, up about 1% for the day. The stock, however, has lost more than 50% of its value since mid-February.
